London housing crisis: should 'affordable' targets be reduced?

18.07.13

It is a stock argument of London Conservatives that the city's boroughs should not require property developers to supply too much in the way of "affordable" housing because that means they end up supplying less housing overall.

With stalled developments across the capital thought by the GLA to be preventing the completion of 180,000 dwellings Steve O'Connell, spokesman for the London Assembly's Tories on planning, has repeated this case for a "flexible" approach to affordable provision.

At Conservative Home he writes:With London's growing population we need to make sure that developers with increasingly thin margins can complete the new homes that London requires. Boroughs must not repeat the mistakes of the past by squeezing developers too hard, otherwise we risk choking off this vital supply of new housing.

O'Connell illustrates his argument with an example from Croydon, which (along with Sutton) he represents on the Assembly and where he is also a member of the Tory-controlled council. He describes how work has recently resumed on what was originally called the IYLO scheme in Croydon town centre, a 20-storey residential tower for which planning permission was granted in 2007 but which, after running into financial troubles and changes in ownership, had been gathering dust and graffiti for two years.

As O'Connell writes, this renewed activity at IYLO, now renamed Island, follows the council's reducing the sum it requires from the present owner of the tower - a hotel-owning Mr Hung of Redbridge - to fund affordable housing elsewhere in the borough. The figure has been dropped from £2.9m to £2m.

Labour has attacked the move, with its leader Tony Newman claiming that the developer has effectively held the council to ransom in order to secure a tidy discount at a time when Croydon is in desperate need of all the affordable homes it can get. Another Labour councillor complains that the council should have insisted on the tower itself containing some affordable homes in the first place.But O'Connell reckons his borough's got a good result. "By asking for a little bit less, we can actually achieve much more," he reasons. Local Tory MP Gavin Barwell thinks the same, citing difficult property market circumstances to justify the lowered affordable housing contribution. "The reality is it's not a choice between £2.9m and £2m but £2m and nothing," he told the Croydon Advertiser.

Well, perhaps. But is the Island tower really going to make Croydon a better place? When completed it will comprise 183 one and two-bedroom flats, which are already being marketed by estate agents in Hong Kong. O'Connell describes it as a key housing development for Croydon, yet we may wonder if it will nourish the type of resilient, mixed communities Tories claim they favour when, say, justifying demolishing established housing estates, as in Earls Court.In January a flat in Latitude 25, part of an exclusive Croydon town centre development completed in 2005, became a party venue and was trashed with fighting spilling out on the streets.Residents complained that rowdiness had become rife after the council permitted the block's owners to mitigate its failure to sell all of its "executive apartments", priced at over £500,000, by letting them, short-term and serviced, to tourists and business people passing through. Regeneration or degeneration? You tell me.